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€17.7m paid out to victims of rogue solicitors in 5 years

Minister Alan Shatter says that the State will not take over the scheme from the Law Society as it would “not be in the public interest” to stump up out of their own pocket.

Solicitor Thomas Byrne, who was sentenced to 16 years in jail this month for a huge property loans swindle.
Solicitor Thomas Byrne, who was sentenced to 16 years in jail this month for a huge property loans swindle.
Image: Niall Carson/PA Wire

JUSTICE MINISTER Alan Shatter has said there is no way that the State is going to take over administering compensation to victims of rogue solicitors – and that the Law Society must continue to manage the scheme.

The Law Society currently administers the Solicitors Compensation Fund and its members must pay an average annual contribution of €760 to the fund in order to receive their practising certificate.

This, and the fact that the Law Society is responsible for making sure their members stay in line, means that it makes sense that the State doesn’t take over, said Shatter in answer to a parliamentary question yesterday. He had been asked if the State should take control, considering the number of high-profile cases of rogue solicitiors in the courts recently.

The Fund has had to pay out €17.7m in compensation to victims of such malpractice in the five years between 2008 to 2012. A total of €48 million worth of claims had been levelled against solicitors in that time period.

There was a 9 per cent increase in claims made against the Fund between 2011 and 2012 (244 and 266 claims, respectively). However, the peak number of claims – 672 – was made in 2008.

In the first six months of this year alone, €1.16 million worth of claims, excluding invalid claims which were refused, was made to the Law Society.

Shatter said: “Against this background, I would consider it prohibitive for the State to assume the enormous and ongoing liabilities that may arise directly or indirectly from the acts of fradulent solicitors or the operation of the Solicitors’ Compensation Fund.

It would not be in the public interest to carry potential liabilities for solicitors’ fraud of tens of millions of euro that would, under such an arrangement, have to be paid indefinitely out of the public purse.

However, the Legal Services Regulation Bill – which Shatter hopes to push through the houses of the Oireachtas next year – is aiming to deal with cases of solicitor fraud or dishonesty. The payment of compensation under the Fund would remain the same.

Solicitor Thomas Byrne jailed for fraud and theft>
Runaway solicitor Michael Lynn arrested in Brazil>

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